Joseph Inokotong, (Abuja) and  Chiamaka Ajeamo

The National Insurance Commission (NAICOM) has announced the extension of the industry’s recapitalisation deadline to September 30, 2021 as well as segmented the process into two phases.

The commission disclosed this yesterday in a circular titled “Segmentation of minimum paid-up share capital requirement for insurance companies in Nigeria”, signed by the Director, Policy and Regulation, Pius Agboola.

The circular read: “The incidences of COVID-19 Pandemic has made it difficult to proceed with the December 31, 2020 recapitalisation deadline. A review of the recapitalisation deadline, therefore, became imperative in order to mitigate likely negative consequences of the pandemic on the exercise.

“The commission hereby extend and segment the recapitalisation process into two phases as follows: 50 per cent of the minimum paid-up capital for Insurance companies and 60 per cent for Reinsurance shall be met by December 31, 2020. Insurance companies are required to fully comply with the approved minimum paid-up capital not later than September 30, 2021.”

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The commission further stated that companies that failed to satisfy the required minimum paid-up capital by the end of December 31, 2020 may be restricted on the scope of business they will transact and; all must fully comply with the required paid-up capital at the end of the new date; September 30, 2021.

The regulator urged all companies to comply with the provisions of the circular adding that, other provisions in previous ones are sustained.

The industry recapitalisation exercise, which commenced on 20th May 2019 has been extended twice now to September 30, 2021.  It requires that life companies increase their paid-up share capital from N2 billion to N8 billion; general business from N3 billion to N10 billion; composite business from N5 billion to N18 billion; and Reinsurance companies from N10 billion to N20 billion.

In the light of the new date, insurance firms are to meet half; 50 per cent and reinsurance companies 60 per cent of the above paid-up capital by the end of the year then; fully recapitalise by September 30 2021.